Image caption
Silicon Roundabout takes its name from London's Old Street roundabout

Google is to provide office space and assistance to new technology companies in London's "Silicon Roundabout".

The company has leased a seven-storey building in the Old Street area, where many start-up firms are based.

Prime Minister David Cameron has signalled his desire to turn the area into "one of the world's great technology centres".

About 300 companies are now working in the area, according to Tech City, the body set up to promote the initiative.

Google said that the building, in Bonhill Street, would host "a range of activities, such as speaker series, hackathons, training workshops and product demonstrations" in addition to providing workspace for new companies.

The California-based company stressed that it was not moving its UK headquarters - currently in central London - to the area.

Many millionaires

Eric Van Der Kleij, chief executive of the Tech City Investment Organisation, said that partnering established technology companies with fresh talent could be beneficial to both parties.

Analysis

Google's Innovation Hub may be a "creative space" - but there's no sign that its researchers will be spending any time there creating anything new.

To be fair, the company's press release stresses that is just the first stage in making its commitment to Tech City a reality.

So, yes, it's a good day for east London's technology ambitions.

But if the vision outlined by the prime minister is to be realised, then the area will need to see companies like Google, Intel and Cisco fill the lofts and warehouses around the Silicon Roundabout with engineers as well as events organisers.

"What [companies like Google] do by having a firm footing in the community is provide a channel for innovation, to partner with them and potentially even sell to them," he told BBC News.

"It accelerates the process of the entrepreneur doing a tech startup, selling for a lot of money, creating a lot of millionaires within their organisation and creating recyclable wealth - then going out to do more innovation."

Large corporations have been lending support to young entrepreneurs in the area for some time.

The nearby Tech Hub project, which offers accommodation and business support, is supported by Google, media group Pearson and software firm BlueVia.

Telecoms companies, including BT and Virgin Media are also making the area a priority for installing ultra-fast broadband connections.

The Silicon Roundabout initiative has been championed by the prime minister as a model for developing the UK's knowledge economy.

Speaking in November 2010, David Cameron said that it was possible to learn lessons from Silicon Valley in the US.

"Go with the grain of what is already there. Don't interfere so much that you smother. But do help out wherever you can.

"Help to create the right framework, so it's easier for new companies to start up, for venture capital firms to invest, for innovations to flourish, for businesses to grow," said the prime minister.

Google expects its new East London Facility to open in 2012, following a major refurbishment.